US economic activity was up in most of the Federal Reserve Districts since the last Beige Book report, but there was weakness in some regions and energy price gains were widespread, the Federal Reserve's most recent update released Wednesday showed.
"Overall economic activity increased at a slight to modest pace in eight of the twelve Federal Reserve Districts, while two Districts reported little change and two Districts reported slight to modest declines," the Beige Book showed. "The conflict in the Middle East was cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment, with many firms adopting a wait-and-see posture."
Manufacturing activity posted small gains while consumer spending was up slightly, even with winter weather and higher fuel prices.
Energy activity received a boost from higher oil prices, but uncertainty remained. The overall business outlook showed widespread uncertainty about future conditions.
Employment was steady to slightly higher, except for a decline in one district. Labor demand was stable in most districts, with mostly replacement hiring and minimal layoffs, but there was increased demand for temporary workers.
The availability of labor improved somewhat, but there were still issues finding skilled workers in some sectors.
"While most Districts indicated that AI had not yet significantly impacted overall staffing levels, some noted that AI-driven productivity improvements had enabled many firms to delay or reduce hiring," the Beige Book showed.
Wages were up at a modest to moderate pace, with wage competition muted outside of some trades and health care.
Price growth was generally moderate overall, but input costs, particularly for energy products, outpaced selling prices.
"Energy and fuel costs rose sharply in all Districts, attributed to the Middle East conflict, leading to higher freight and shipping costs and higher prices for plastics, fertilizers, and other petroleum-based products," the Beige Book showed, adding that input costs were also higher outside of energy.
The report was prepared at the New York Fed based on information collected on or before April 6, before the release of the March consumer price report on April 10.